The earnings from other sources, apart from salary, are not covered in Form 16 (Representational)
Attention taxpayers! The last date to file Income Tax Return (ITR) for individuals, who don't need an audit of their accounts, is almost here. The due date is July 31, 2024.
As per the I-T Department's website, more than 2.7 crore ITRs have been filed till July 14, 13 per cent more compared with the returns filed during the same period in 2023.
While filing the ITR, taxpayers are required to mention incomes in a financial year from all other means, apart from their main sources like salary or business. Often, salaried taxpayers miss out on reporting certain crucial details about the receipts from other sources. Form 16 is a very important document for tax filing for salaried taxpayers, but this is not enough.
The earnings from other sources, apart from salary, are not covered in Form 16. All taxpayers, whether salaried or not, should disclose their incomes from all sources while filing ITR.
Here's a look at the incomes that taxpayers should not miss while disclosing while filing ITR.
1. Dividends and Mutual Fund investments
At times, people invest money in shares of a company or in mutual fund schemes. These equity investments go unnoticed by salaried individuals due to the small amount earned on the investments. However, when a company pays a dividend to shareholders it needs to be reported in the ITR. Similarly, the gains on the investments in mutual funds should also be disclosed. Any such receipts will attract capital gains tax depending on the duration of the investments. Further, it should be checked whether any tax was deducted from this dividend. If yes, then this can be counted as part of the tax paid during the financial year.
2. Bank interest
Even if it could be a small amount, the interest earned on the savings bank account should be mentioned in the ITR. If this is not done, then there will be a mismatch with the details present with the I-T Department. You may receive a notice from the Income Tax Department for not reporting the interest earnings on your bank savings and fixed deposits.
3. Capital gains
The profit or losses made by selling capital assets are explained in ITR. Before filing returns, check whether any assets have been sold during the year. If yes, then any capital gains on the sale of the assets should also be reported in the ITR. If the asset is held for less than a year it would attract short-term capital gains tax (STCG) and when the asset is sold after more than 3 years the returns will be taxed as long-term capital gains (LTCG).
4. Rental income
Rent received from a house property or commercial property is taxed as income from other sources, or profits/gains from business or profession. The same also applies to a land parcel or plot that has been let out.
5. Income from projects/assignments and other sources
The earnings in a year from all other sources like freelance assignments, projects, or any other business should also be reported in the ITR.
Any income should not be evaded as this will lead to the imposition of a penalty. Underreporting or failure to disclose income could even lead to legal proceedings.